Family Offices

Overview

A traditional family office is a private company that manages investments and trusts for a single family Group. Such companies provide property management, day-to-day accounting and payroll activities, and management of legal affairs. Additional personal services might be provided, such as managing household staff and making travel arrangements.

For the wealthiest of families, the establishment of a family office arrangement is an obvious solution to the complex wealth management problems that arise. However, not every family can afford a stand-alone arrangement, and Cayman National's family office services can provide the perfect solution which binds together the key aspects of the family office structure, but in an affordable way. Our aim is to provide a personalised wealth solution that helps preserve the interests of family members, using the unbiased and open architecture wealth management practices, for the purpose of growing, preserving and eventually transferring the family's wealth to future generations.

Cayman National's family office service is available either in the Cayman Islands or the Isle of Man, depending on the client's preferred time zone. Solutions involving both centres can be devised.

The Cayman National Family Office Service

Typically, by the time a family has identified its need for a more structured approach to its financial affairs, it will have grown into a complicated puzzle, one that is complex and difficult to manage, and one where it is increasingly difficult to monitor the performance (or otherwise) of assets. This structure will undoubtedly include investments, such as shares in family companies; property, perhaps many banking relationships around the globe, different investment advisers, tax advisers, property managers, and on so.

Our aim is to add structure and control to the solution, without necessarily changing core relationships that currently exist. We also think it important that the solution we devise does not restrict your future options.

We achieve these aims in a number of areas:

Family Office Structure

The kernel of the family office is the Private Trust Company ("PTC"). This is the overarching holding company of the family's assets. The PTC can be incorporated in either the Isle of Man or Grand Cayman. Depending on family circumstances, it may make sense to hold the shares in the PTC through a trust. Cayman National can provide technical and administrative services to both the trust and the PTC. Our solution is fully portable; should family circumstances change, it is possible to re-domicile the PTC in another jurisdiction, or to change the administrators of the PTC. Alternatively, as the family office grows, the PTC can be administered 'in house'. This arrangement does not tie you into the Cayman National Group.

Below the PTC, a number of holding companies and/or single purpose companies can be structured, depending on need and circumstances. Family trading businesses can be introduced; structures to own aircraft, yachts or property can feature, and the arrangement can also enter into joint ventures with other parties. There is inherent and almost unlimited flexibility in this arrangement.

Family Council

This is a key co-operative way of making decisions that affect all family members; depending on individual circumstances, the family council can be involved in all major decisions, or just some, leaving the patriarch or matriarch to handle others. We can work closely with the family council to ensure that decisions, once agreed, are implemented speedily and efficiently.

Wealth Management

Cayman National can help facilitate a consolidated approach towards management of the family's wealth. Using our wealth management expertise, we can provide high level asset allocation services which can be used to validate existing investment managers/mandates. If required, we can help the family council identify 'best of breed' investment managers for their wealth. Our skills in strategic asset allocation can assist in helping the family outline their wealth objectives, risk tolerance and expectations, leading towards the development of an agreed strategy both for capital growth and income.

Our extensive experience in the hedge fund sector can assist in the appropriate use of alternative investment classes and structured products.

The overarching aim should be to preserve and enhance wealth in the long term, and across generations. Too often, investment managers focus on short term performance. We can help balance the need to actively and continually benchmark performance against these longer-term planning requirements.

Risk Management

Family offices can be faced with many legal and investment challenges, and can come under stringent regulatory scrutiny. These issues become more pronounced in the case of multi-generational families, with members based in various countries, who hold assets globally. The mitigation and balancing of risk is of paramount importance for many family office clients. We can help to identify potential risks for the family and take measured steps to protect against such risks going forward.

Philanthropy

More and more successful families wish to use their wealth to make a positive difference to the world.

In the past, family philanthropy would have taken the form of a simple gift to charity, or quite likely the establishment of a grant-making foundation in a specific country. Many families now have connections around the world and this in turn requires a more sophisticated and performance-focused approach. Philanthropists today expect to take full advantage of the value of their charitable investments. They look for maximum tax-efficiency to ensure that more of their money finds its way to the people who need it.

To this end, Cayman National is well placed in assisting clients in the formation of charitable trusts and foundations, and in the structuring of tax-efficient funding.

Education and Succession Planning

A key goal of any family is to preserve wealth over the long term; to avoid the old adage of 'rags to rags in three generations'. There are two critical aspects to this, and we can assist in both. The financial education of successive generations is critical to the sustainability of wealth. Younger members of the family can become increasingly more involved in the decision making processes, in a controlled manner.

Cayman National can also offer a key advisory role to the family; one that is loyal, enduring, and impartial.

Administration, Monitoring and Reporting

This is a key role provided by Cayman National. We can provide all administration services for the various elements within the family office structure. We can provide an accounting and reporting service for single structures within the arrangement or on a consolidated basis at the PTC level. The use of an independent firm to provide these services can help avoid conflicts of interest, and can provide the requisite level of disclosure at different levels within the family.

Using our teams of accountants and specialists in portfolio valuations, we can provide reporting services to as detailed level as the client requires.

Our expertise in running structures to hold assets - be they property, investments, trading companies, aircraft/yachts or works of art - can be brought into play to the extent required by the needs of the family. But, and this differentiates our service to that of the traditional in-house family office, you only pay for the services you need.

For more information, please email either carlos.guzman@cnifs.com or ian.bancroft@cniom.com.

"The legacy that you leave is not simply the inheritances left to your heirs. It is the part of you that lives on in the hearts and minds of others after you are gone. It symbolizes the influence you had on your family and loved ones and the impact you had on society"

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